Mauritius VASP License

Mauritius VASP License 

• The Mauritius VASP License, as introduced under the Virtual Asset and Initial Token Offering Services (VAITOS) Act 2021, is a legislative system intended to regulate and license persons involved in virtual asset business from or within Mauritius. Issued by the Mauritius Financial Services Commission (FSC), the license provides for VASPs to have high prudential standards such as sufficient financial means, good management, and anti-money laundering. The VAITOS Act includes a wide array of activities such as exchanging virtual assets with fiat currencies, keeping virtual assets, and running virtual asset trading platforms. Authorized VASPs should be transparent, safeguard client funds, and comply with normal regulatory standards to ensure market integrity and investor trust. 

• Internationally, the virtual asset market has experienced exponential growth, with more than 30,000 cryptocurrencies and a large number of VASPs playing a global role. Mauritius, through the application of this extensive licensing regime, takes its position as a competitive FinTech center in the African and global markets, drawing foreign investment and innovation within the virtual assets sector. We at Tetra Consultants offer extensive business services ranging from expert advisory in acquiring Mauritius VASP Licenses, regulatory compliance, to assisting your company in its development in the rapidly growing virtual asset sector. 

• Our services include: 
  • Mauritius VASP License 
  • Register company in Mauritius 
  • Legal drafting services 
  • Nominee director services 
  • Registered office address 
  • Corporate bank account opening 

Advantages for obtaining Mauritius VASP License 

Strategic time zone 

• Mauritius is strategically placed in the GMT+4 time zone, enabling VASPs to carry out activities effectively throughout Asia, Africa, Europe, and the Middle East on the same business day. This enables real-time communication, quicker decision-making, and easier coordination with global clients and partners, resulting in greater operational effectiveness. 

Effective banking sector 

• Mauritius boasts a sophisticated banking system consisting of numerous local and international banks offering a vast range of financial services. This strong banking system can cater to VASPs with good corporate accounts, payment processing, and custodial services, which are essential for safe and efficient virtual asset transactions. 

Business-friendly environment 

• Mauritius has a high ease of doing business with effective processes for company registration, licensing, and compliance. The government’s pro-business stance reduces bureaucratic barriers, making it easy for VASPs to start and operate quickly while having a clear legal environment. 

Government assistance 

• Innovative introductions are always being advocated in fintech by the Mauritian government through transparency in regulation, incentives, and paradigm. Such incentives nurture the growth of VASPs by ensuring a conducive environment for business wherein various startups and even older companies are allowed to grow in a sector related to virtual assets. 

Credibility and compliance 

• Mauritius’ VASP regulatory framework is in accordance with global standards, such as the FATF guidelines on virtual assets and VASPs. This means that licensed entities follow international anti-money laundering (AML) and counter-terrorism financing (CTF) requirements, enhancing their credibility and enabling easier cross-border activities. 

Holistic regulatory framework 

• There are specific and clear regulations in the VAITOS Act that govern activities related to virtual assets. Under such an umbrella framework, VASPs will be able to clearly understand what their legal obligations are, manage risk, and conduct their business in a clean and healthy environment for sound development. 

Investor confidence 

• Regulation enhances investor confidence by ensuring that VASPs are held to high standards of operation, e.g., safeguarding client assets and transparency. Such protection attracts more investors, thus the growth and stability of the virtual asset market. 

Innovation and growth 

• By offering safe regulatory environments and support, Mauritius encourages VASPs to innovate and come up with new products and services. The environment encourages diversification and technological growth within the virtual asset industry, allowing companies to continue competing globally. 

Shaping the ecosystem 

• Operations in Mauritius come up with a vibrant ecosystem for VASPs for digital assets which brings investments, talent, and innovation making Mauritius more of a regional virtual asset services hub in the world. 

Timeline for obtaining Mauritius VASP License 

• The procedure of acquiring a Mauritius Virtual Asset Service Provider (VASP) license via Tetra Consultants generally involves several important phases, each carefully overseen to facilitate a seamless and streamlined experience. First, the company incorporation process takes around 2 weeks. In this duration, all documentation required is maintained by Tetra Consultants and the registration is done through the Companies and Business Registration Integrated System (CBRIS). This initial step sets up your company presence in Mauritius, a requirement for the VASP license application. 

• After incorporation, the subsequent significant step is corporate bank account opening, which typically takes 4 weeks. Taking advantage of good relationships with local banks, Tetra Consultants will help to open a bank account, so your business will have the required financial infrastructure to comply with regulatory and operational needs. A corporate bank account is crucial for handling client money and anti-money laundering (AML) compliance. 

• After we register company in Mauritius and corporate bank account opening, attention turns to the preparation and filing of the VASP license application with the Financial Services Commission (FSC) of Mauritius. Although the VAITOS Act requires the FSC to approve or deny a license within 30 days, in practice, it can take anything from 3 to 6 months to be licensed. This period provides for comprehensive regulatory examination, requests for information, and compliance in full of governance, capital, and operational requirements. In total, from the incorporation of the company to being granted the Mauritius VASP License, the whole process typically takes about 5 to 6 months with Tetra Consultants. Our professional guidance at each step facilitates simplification of compliance and ensures the highest possible success rate for the licensing process. 

Regulatory authorities for Mauritius VASP License 

• The Mauritius Virtual Asset Service Provider (VASP) license is overseen by the Financial Services Commission (FSC) of Mauritius. The FSC was created under the Virtual Asset and Initial Token Offering Services (VAITOS) Act, 2021, which took effect on February 7, 2022. The FSC has the mandate to regulate and supervise VASPs and Initial Token Offering issuers in the non-bank financial services industry. The VAITOS Act ensures a robust legal framework that mandates all VASPs that operate in or from Mauritius to be licensed by the FSC prior to conducting business. This framework is aligned with global best practices, notably the Financial Action Task Force (FATF), so that effective anti-money laundering (AML) and counter-terrorism financing (CTF) measures are in place. 

• Under the VAITOS Act, the FSC enjoys expansive supervisory authority, such as carrying out inspections, issuing condition on licenses, and imposing penalties for non-conformity. Licensed VASPs will be required to possess adequate financial resources, fit and proper controllers and chief executives, adequate safeguarding of clients’ assets, and fulfillment of transparency and report obligations. This regulatory framework makes Mauritius a reliable and competitive virtual asset business hub in Africa and the world. 

Activities allowed under Mauritius VASP License 

Working as a virtual asset dealer 

• This activity entails buying, selling, or exchanging virtual assets directly either for fiat or other virtual assets. Registered dealers provide liquidity and price discovery in the virtual asset market, allowing investors and users to buy and sell with ease. 

Offering virtual asset brokerage services 

• VASPs act as brokers are intermediaries for buyers and sellers of virtual assets. They allow transactions without the VASPs owning the assets themselves, allowing clients to complete trades in a cost-effective manner while maintaining compliance with regulatory requirements. 

Running virtual asset trading platforms or exchanges 

• This involves operating online platforms or marketplaces whereby users can list, purchase, and exchange virtual assets. Registered exchanges are required to have strong security, transparency, and compliance measures to safeguard users and ensure market integrity. 

Safekeeping and administration of virtual assets 

• VASPs can offer custodial services, custody and management of virtual assets on a client’s behalf. It involves secure storage and secure keys from theft, loss, or unauthorized use, which is essential for client asset security. 

Offering financial advisory services 

• Authorized virtual asset service providers may provide professional advice about the virtual asset and advisory services pertaining to the issuance, offering, and sale of tokens. This advice assists clients in properly weighing their options to either invest or navigate a maze of market-and-regulatory considerations. 

Managing or transferring virtual assets 

• This activity involves services pertaining to the management, transfer, or movement of virtual assets for clients. It entails enabling transactions, asset administration, and compliance with transfer protocols and regulatory requirements. 

Engaging in or offering financial services relating to ITOs 

• VASPs may conduct Initial Token Offerings (ITOs) through underwriting, marketing, and facilitating the distribution of new tokens for issuance and sale. VASPs undertake to provide this support while also guaranteeing compliance with regulatory requirements and protection for investors. 

Participating in DeFi activities 

• As decentralized finance becomes more prevalent, regulated VASPs can engage in services such as lending, staking, or yield farming in the DeFi system. These operations are under certain licensing classes (e.g., Class M) and are under a requirement to follow regulatory requirements to reduce risks. 

Providing services involving the transfer of virtual assets 

• VASPs can offer services that enable the transfer of virtual assets between parties, both domestically and cross-border. This includes AML/CFT compliance like the “Travel Rule,” which ensures that transaction data is sent with asset transfers to avoid illicit activities. 

Activities excluded under Mauritius VASP License 

Electronic indications of fiat currencies 

• Virtual assets that are digital representations of fiat currencies issued by the Bank of Mauritius or any foreign central bank are outside the VAITOS Act and therefore do not need a VASP license. 

Securities and other financial instruments regulated 

• Virtual assets that are securities, security tokens, or other financial assets subject to regulation under the Securities Act, 2005 are not included. These are governed by the Securities Commission and not the FSC under VAITOS. 

Closed-loop items 

• Non-transferable, non-exchangeable virtual things that have no use as instruments of payment or investment and no sale in secondary markets beyond a closed loop do not qualify under the VASP licensing scheme. 

Banks and national payment system licensees 

• Banks regulated under the Banking Act, 2004 and licensees of licenses under the National Payment Systems Act can only carry on virtual asset business after obtaining written permission from the Bank of Mauritius and are otherwise exempted from direct VASP licensing except when being carried out through subsidiaries. 

Peer-to-peer trading platforms that lack custodial services 

• Platforms that only offer a venue for buyers and sellers to submit bids and offers or trade directly without possessing or managing virtual assets are exempted from VASP licensing. 

Unauthorized activities before VAITOS act came into force 

• Operators of virtual asset services prior to the enforcement of the Act can be exempted temporarily but are required to seek licensing within transitional periods. 

Types of Mauritius VASP License  

Class M – Virtual Asset Broker-Dealer 

• This license enables VASPs to conduct the exchange of fiat currencies for virtual assets or exchange between one or more types of virtual assets. It encompasses activities like dealing, brokering, or broker-dealer acting in virtual assets. The applicant must present a soundly detailed business plan, adequate capital (about MUR 2,000,000 or equivalent), and qualified management residing in Mauritius. The license ensures compliance with AML/CFT requirements, safeguarding client assets, and measures to provide market integrity. 

Class O – Virtual Asset Wallet Services 

• License holders conduct wallet services enabling virtual asset transfers between wallets, such as inter-wallet and intra-wallet transfers. They hold private keys and user accounts to provide safe and efficient asset transfers. The license demands adequate working capital to operate a business for not less than 12 months under different market conditions and obedience to regulatory requirements. 

Class R – Virtual Asset Custodian 

• This license entails the safekeeping and administration of virtual assets or instruments facilitating management over virtual assets. Custodians must protect client assets against theft, loss, or fraud through having effective security and risk management systems. The minimum capital is higher (about MUR 5,000,000 or equivalent), reflective of the central role of custody services. Licensees must be subject to rigorous governance and reporting standards. 

Class I – Virtual Asset Advisory Services 

• This license allows providers to participate and offer financial advisory services related to the issuance, offering, or sale of virtual assets. It is intended for companies that are advising issuers or investors on virtual asset transactions. Licensees must have sufficient working capital to pay their debts and demonstrate expertise and compliance with regulatory standards. 

Class S – Virtual Asset Market Place 

• This license is for virtual asset exchanges-centralized or decentralized exchanges-that enable third parties to exchange virtual assets for fiat currency or other virtual assets on their platforms for fees or commissions. Operators are required to satisfy capital requirements (approximately MUR 6,500,000 or equivalent), adopt anti-market abuse controls, ensure client asset protection, and provide transparency and security on their platforms. 

Umbrella license 

• Candidates can apply for a multiple class umbrella license encompassing the M, O, R, I, and S classes, which enables them to engage in a wide scope of virtual asset business activities under a common regulatory framework. To do so, they need to meet the total combined capital, governance, and compliance requirements of all license classes included. 

Steps for obtaining Mauritius VASP License 

Step 8: Ongoing compliance support 

• Even after you obtain the VASP license successfully, Tetra Consultants continues to offer compliance assistance on an ongoing basis. We keep you posted about regulatory changes and assist you in installing effective internal procedures to ensure compliance. 

Documents required for Mauritius VASP License  

• Notarized copies of passports of applicants. 

• A duly filled in authority form and written and signed consent of each promoter or controller are needed. 

• A copy of the certificate of incorporation of the applicant company. 

• A comprehensive business plan or feasibility study detailing the nature and scale of the proposed business activities. 

• AML/CFT policies and measures to be adopted to meet obligations under the VAITOS Act and related legislation concerning anti-money laundering, combating the financing of terrorism, and proliferation. 

• Documents related to Know Your Customer (KYC) and customer due diligence processes. 

• A detailed management plan and governance structure. 

• Written authorization from the directors for information disclosure. 

• Proof of payment of the application fee as prescribed in FSC Rules. 

• Documentation regarding the appointment of a Senior Executive by the board, to be approved by the FSC. 

• Statutory filings lodged with the Registrar of Companies. 

Regulatory requirements for obtaining Mauritius VASP License 

• The company should have at least two directors and one senior manager who are residents of Mauritius, having the requisite competence, experience, and proficiency to direct the business operations of the VASP. We can offer nominee director and shareholder services for fulfilling such a requirement. 

• Controllers, beneficial owners, associates, and officers must meet the FSC’s ‘fit and proper’ criteria, including financial standing, qualifications, experience, and character. 

• FSC sanction will be required in the event of any shareholding changes, appointment of controllers, beneficial owners or officers. 

• The VASP must have an office in Mauritius to allow regulatory oversight as well as continue local presence. 

• All companies (other than small private companies or Category 2 Global Business Companies) are required to have a company secretary who is a natural person who is ordinarily resident in Mauritius and qualified to carry out the role. 

• The VASP should have sufficient financial means, such as the minimum paid-up capital to be determined by the FSC under the class of license. 

• The VASP should have effective anti-money laundering (AML) and counter-terrorism financing (CTF) policies in accordance with the VAITOS Act, the Financial Intelligence and Anti-Money Laundering Act 2002, and other legislation. 

• The VASP should have appropriate measures in place for the protection and management of client assets, such as having separate accounts for client assets. 

• The VASP should introduce controls to eliminate market manipulation, abusive trading techniques, and other market abuses. 

• The company is required to inform the FSC of any significant changes in its business operations or senior management within 7 days. 

• The VASP is required to meet continuous obligations like filing audited annual financial statements, keeping proper records (including beneficiaries and originators of virtual asset transfers), and fulfilling any conditions precedent to the license. 

Cost to obtain Mauritius VASP License 

• In acquiring a Mauritius VASP License through Tetra Consultants, various fees and charges are incurred along the way. These commonly comprise government license and application fees paid to the Financial Services Commission (FSC), registration fees for the company, as well as opening and maintenance fees for a corporate bank account. Also, there are expenses involved in preparing and filing the detailed documentation needed for the application for license, including business plans, compliance manuals, and risk assessment frameworks. Operational costs such as engaging competent personnel, including directors, compliance officers, and auditors, who are in compliance with the FSC’s residency and competence requirements, also constitute part of the total cost structure. 

• Tetra Consultants has an open pricing policy throughout the licensing process. We provide a transparent and accurate breakdown of all that is being spent, and you can easily see where and how your money is being spent. Our experts walk you through every category of expense, and it is easy for you to budget accordingly without surprise or unsuspected fees. By engaging with Tetra Consultants, not only do you receive professional guidance in handling regulatory matters but also a trustworthy consultant who believes in open communication and cost-effectiveness in acquiring your Mauritius VASP License. 

How can Tetra Consultants help you with obtaining Mauritius VASP License? 

• Employing Tetra Consultants to acquire your Mauritius VASP License is most advantageous, shattering the complexities of the arduous regulatory framework and bestowing on you the optimum success. As your business setup partner of choice internationally, we deliver one-stop-shop solutions ranging from consultation and incorporation of company to preparation and filing of the VASP license application with the FSC. Our professional expertise ensures all the needs of law, for example, AML/KYC policies, recruitment of qualified personnel, and effective governance frameworks are met. We are constantly watching over the review process of applications and replying to any question from the FSC to facilitate communication. 

• Apart from VASP licensing, Tetra Consultants offers an extensive set of business services to support you in your international expansion. These are international trademark registration to assist you in securing your company name internationally, corporate bank account opening, and regulatory compliance consulting based on your own requirements. We also assist with visa application, accounting and tax obligations, and many more services to your company. By opting for Tetra Consultants, you have a complete range of services that will make your company expand and flourish in the international market. 

Looking to obtain Mauritius VASP License  

• Contact us to know more about Mauritius VASP License and our team will get back to you in 24 hours. 

FAQ:

What is a Mauritius VASP License?

• A license provided by the Financial Services Commission (FSC) to enable Virtual Asset Service Providers to be operated legally in Mauritius under the VAITOS Act, 2021.

Who requires a Mauritius VASP License?

• Any business engaging in virtual asset activities like exchange, custody, advisory, or trading platforms within or from Mauritius.

Is a physical office required in Mauritius to obtain the license?

• Yes, having a physical presence in Mauritius is required to have regulatory control.

Can foreign investors apply for a Mauritius VASP License?

• Yes, foreign investors are qualified to apply, provided that the company is controlled and directed from Mauritius.

How much capital is a VASP license?

• Capital requirements vary by license class with minimum paid-up capital amounts set by the FSC depending on the type of business activity.

Are there any on-going compliance requirements after having got the license?

• Yes, VASPs are required to comply with reporting, AML/CFT policies, audits, and to notify the FSC of material changes.

Can banks make an application for a VASP license in Mauritius?

• Banks can submit applications for some types of VASP licenses subject to prior written consent from the Bank of Mauritius.

How is protection of client assets guaranteed in the license?

• VASPs must segregate client assets, implement custody arrangements, and maintain robust security measures.

Can one entity be issued multiple VASP licenses?

• Yes, but the VASP must meet the combined capital and compliance needs for all classes of licenses that it possesses.

What happens if a VASP does not follow the regulations?

• The FSC has the authority to impose a penalty, fine, or revocation of the license under the VAITOS Act.